Herbert London: Fascism In America

It is often argued by critics of the Obama administration that it is socialistic, i.e. expanding governmental authority over the means of producing and distributing goods. Alas, there is something to be said for this point of view. As I see it, however, a more accurate way to describe the Obama government is corporatism or a political system in which the principal economic functions are designated and given favorable treatment. The most appropriate way to assign meaning to this phenomenon is fascism.

During the Nazi period firms such as Mercedes Benz and Krupp Steel was given tax advantages and privileges denied other German companies. Not only did these companies favor Hitler’s regime, but they were favored by the regime. This inextricable nexus benefited both parties since privilege was conferred by government which in turn bought political and economic support.

The recent U.S. government deal to avert the fiscal cliff by legislating income tax and capital gains hikes obscured another part of the arrangement: 75 special interest tax breaks – a list of corporate interests that receive tax perks and are not publicly revealed. Nonetheless, some of this special treatment has leaked. For example, there is an accelerated tax write off for owners of Nascar tracks. There is a tax credit for companies operating in American Samoa, including the StarKist factory owned by Nancy Pelosi’s husband. Distillers received a $222 million rum tax rebate. Most notable, film and television producers can expense the first $15 million of production costs incurred in the United States. This Hollyood special will cost the taxpayers $430 million over the next year. It obviously paid for Hollywood to back President Obama in the last campaign.

As one might guess, renewable energy in the form of wind and algae received $2 billion of credit even though the nation is going through a natural gas drilling boom. The more one is green, the more green bucks flow. Needless to contend, the total cost will be far greater than these estimates. And even though the stock market hasn’t yet revealed its sentiments about this shady deal, this misallocated capital will assuredly slow economic growth.

The question that remains puzzling is the silence of the left about this corporate welfare scheme. Where are the voices of indignation? What happened to the outspoken Occupy Wall Street crowd? Does Obama get a pass for his soothing rhetoric?

Even if one believes tax increases on “the rich,” those earning over $450,000, is warranted there certainly isn’t a constituency for corporate greed. On the one hand, the administration acknowledges dramatically increased expenditures that must be curbed; on the other hand, it maintains expenditures be damned. Designated friends of the Obama government deserve special treatment because they supported him when he needed their help. If this isn’t a classic display of fascism, what is it?

Since the word fascism evokes fear and anger, it is rarely used. But as I see it, the word does describe what is going on. This goes beyond “crony capitalism;” in fact, it doesn’t resemble capitalism. In this system markets don’t work at all; it is who you know and the kind of influence you can exert.

It is not coincidental that the Obama administration pushed aside the primary bond holders of General Motors in an effort to give the Union of Automobile Workers (UAW) effective control of the company. In this instance, as in so many other cases, the president secured the votes he needed for reelection. The union did not forget what he did for them.

This kind of corporatism eats away at the public confidence in government. After the bill was struck, the president had the temerity to praise the legislation by noting: “further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.” By any interpretation this is a bald faced lie. The special privileges granted designated corporations represent the loopholes and deductions unavailable to the rest of Americans. Where is Orwell when you need him? In this administration you say the opposite of what you do. Count on public ignorance to promote the fraud. Speak the language of FDR and apply the principles of Bonnie and Clyde. The public may not realize it, but this fiscal cliff deal makes it clear that fascism has come to America.

Herbert London is a senior fellow at the Manhattan Institute, president emeritus of Hudson Institute and author of the book The Transformational Decade (University Press of America).

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